Meaning
Adhering to U.S. tax regulations for foreign accounts.Definition
FATCA, or the Foreign Account Tax Compliance Act, is a U.S. law. It requires foreign financial institutions (FFIs) to report U.S. persons’ financial accounts to the IRS.Key Requirements
FFIs must identify U.S. account holders and report account details. Non-compliance leads to a 30% withholding tax on U.S. source payments.Reporting Obligations
FFIs typically report annually to the IRS, often through intergovernmental agreements (IGAs) with partner countries.Author
